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promotional account funds were to be used by petitioner as
payment for advertising materials and services provided by
petitioner's art and printing and advertising departments. The
promotional account funds are income when received; of course,
petitioner will be entitled to claim its advertising expenses as
they are incurred. By including only the balance of the
promotion accounts in petitioner's income, respondent in effect
determined that the promotional fund contributions constituted
gross income and the promotional fund disbursements were
allowable deductions. Accordingly, we sustain respondent's
determination.
Issue 2. Food-Show Currency
Respondent determined that petitioner's income should be
increased by $162,370 and $255,509 for 1989 and 1990,
respectively, for the amount of currency distributed by the
vendors to the member stores at the 1989 and 1990 food shows from
vendor promotional accounts and vendor check transactions. Seven-
Up Co. v. Commissioner, supra at 977;9 petitioner asserts that
the cash it delivered to the vendors from the promotional
accounts and check transactions at the 1989 and 1990 food shows
9 Although this determination includes amounts distributed from
vendor promotional accounts, these amounts were determined to be
included in income only once, as respondent included only the
yearend balances in the promotional account (advertising) income
determination. See supra note 6.
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